It is the lifeline that has kept nearly 2 million people in NSW, Victoria and ACT with stable weekly income during Covid lockdowns.
As of June, government Covid-19 disaster payments – paid either $ 750 or $ 450 per week, or $ 200 per week for existing welfare recipients – have been available for people who have lost their jobs. due to home stay restrictions.
First announced by the Commonwealth reluctantly after the Melbourne foreclosure in June, payments were raised to their current rates when the Delta variant started crossing NSW and Victoria.
But now, with NSW and the also recently locked down ACT hitting the 80% vaccination target and Victoria on the verge of doing the same, the payments are on the verge of disappearing.
Announcing the plan to end the payment in late September, Treasurer Josh Frydenberg argued that “the economy is well positioned to rebound” once restrictions are relaxed.
“Employment outcomes will improve,” Professor Jeff Borland, a labor market expert at the University of Melbourne, said of ending the lockdowns. “But I think there is still a fair amount of uncertainty as to whether the rebound will be as strong as it was last year.”
What this means, experts say, is that while some workers won’t need the disaster payments because their jobs were waiting for them once the restrictions are relaxed, others may find their hours insufficient or even nonexistent. , because their employer is not working. at full capacity.
This may be due to capacity restrictions in certain industries under different state government roadmaps, or an initial lack of demand as the economy takes a long time to come to life.
Sean, a 50-year-old Melbourne photographer who doesn’t want his last name used, earns most of his money working for a school photography company. He also does freelance work, including filming sporting and fitness events.
After taking part of the superannuation last year, Sean says the disaster payout has kept him afloat during these latest lockdowns.
âIf I hadn’t received this payment at all, my savings would have gone to zero,â he says. “Three and a half months ago, I sat down and did all the sums on all of this, and I started to cry.”
As part of the federal government’s plan, disaster payments will be reduced to $ 450 the first week after a state hits the 80% immunization goal, before dropping to $ 320 the following week.
After that, people will be asked to ask for the job seeker’s payment, which is around $ 630 biweekly, which is $ 870 less than what Sean received biweekly.
“The industry on which I rely for my daily work [school photography] is restricted, severely restricted, âhe says. âI feel bad for my boss. He can’t give us a job. Schools are not allowed to have us in their building. This is the problem.”
During shutdowns last month, 1.1 million people in NSW claimed disaster payments, while 700,000 made in Victoria and 66,000 in ACT. Some have since dropped the support as beneficiaries are now required to reapply every week.
Angela Jackson, chief economist at Equity Economics, believes the government is suspending payments too quickly.
She fears that “tens, if not hundreds of thousands” of people will find themselves looking for work after disaster payments are over.
Professor Borland also thinks the transition is “brutal,” but he’s less grim, saying he doesn’t expect a “huge shift” of people from disaster payments to job seekers. He adds, however, that there will certainly be those who end up claiming the allowance.
These workers will join around one million people already receiving unemployment benefits, up from around 700,000 before the pandemic.
âOverall this is a very rapid withdrawal of support from what happened last year under Jobkeeper,â Jackson says.
“Having said that, what we’ve seen over the past couple of weeks is a real drop in the number of people on these [disaster] payments, particularly in NSW and ACT. “
Jackson says the amount paid into NSW has increased from around $ 600 million per week to $ 200 million. Services Australia did not respond to a request for data on the number of recipients of payments.
Gavan Ord, senior director of trade and investment policy at CPA Australia, says not all companies will be able to negotiate 100% despite the end of lockdowns.
He says people who normally work in the arts and live music, tourism and events industries will be hit hardest by the end of disaster payments.
âIt’s the workers that go missing until companies see that certainty and see customers coming back,â he says.
Ord says many CBD companies would also struggle as people continue to work from home.
James Power, the Prince Bandroom’s booking manager in Melbourne, is “incredibly worried” about the end of disaster payments.
The Prince Bandroom is one of dozens of venues that have joined a campaign, Save Our Scene, arguing that Victoria’s roadmap is unsustainable for the music industry.
Power says some of the people who keep the industry going – bartenders, bookers, promoters, technicians and musicians themselves – were facing weeks without pay.
âIt’s such a marginal business that we have to run at 100% capacity to make it work,â he says. âIf we don’t, we ask for continued financial support until we get back to 100% of our capacity. “
When the government announced its intention to end disaster payments, the Australian Unemployed Workers Union called the move “catastrophic,” saying the “only certainty” it offers many low-income households is that a life of great poverty is definitely in their immediacy. future”.
Jackson agrees on the rate of job seekers. âWhat we’re going to do is push people into abject poverty, well below the poverty line, where they can’t cover the basic cost of living,â she said.
Cassandra Goldie, chief executive of the Australian Council of Social Services, says the government’s decision to introduce disaster payments was an acknowledgment that the job seeker was “completely inadequate”.
“It is not enough to say that people can claim the payment of $ 45 per day for job seekers if they continue not to have paid work after reaching vaccination goals,” she said.
Goldie also warns that not all people can access job seekers, such as temporary visa holders. “If they can’t find a job after the disaster payments have been cut within a few weeks, they will be left with no income.”
The job seeker is also put through a cash flow test, while disaster payouts were not. This means that a single person with $ 10,000 in savings would have to wait 10 weeks before receiving their first job seeker payment.
With the disaster payout ending, Sean, who withdrew some of his retirement pension last year, will have to use up a large chunk of those savings before he can get any support.
âIn four weeks I’ll be at zero income,â Sean says. “It’s a big deal.”